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Can Banks Save Mountains?

Author

Listed:
  • David Haushalter
  • Joseph J Henry
  • Peter Iliev

Abstract

We study bank policies to limit lending to companies engaged in mountaintop removal (MTR) coal mining, a form of coal extraction that has raised many environmental concerns. Using the staggered introduction of these policies, we document that these policies did not lead to meaningful changes in average bank lending or MTR mining. However, larger banks, banks that are under media pressure, and banks operating in the affected states are more likely to reduce MTR loans. Our results are consistent with the hypothesis that banks announced these policies under pressure and to improve their green credentials. (JEL G21, G28, G32)Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • David Haushalter & Joseph J Henry & Peter Iliev, 2023. "Can Banks Save Mountains?," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(4), pages 761-791.
    • Handle: RePEc:oup:rcorpf:v:12:y:2023:i:4:p:761-791.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfad013
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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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